The State Assembly Is Foreclosing Hochul’s Housing Supply Plan

AS ALBANY CONTINUES to negotiate the state budget, Governor Kathy Hochul’s plan to address New York’s dire housing shortage has collapsed. Four sources with firsthand knowledge told New York Focus that the insurmountable obstacle was the state Assembly, which refused to entertain one of the plan’s centerpieces: requiring all towns and cities to grow their housing supply.

Hochul’s proposal, dubbed the New York Housing Compact, would have required New York City and its suburbs to increase their housing stock by three percent every three years and to allow more housing near subway and train stations. Upstate towns and cities would have been required to achieve one percent growth over the same time span. If towns failed to meet these targets, developers could get approval for new housing directly from the state, bypassing local zoning that often limits new housing.

The plan aimed to double New York’s housing growth over the next decade, adding 800,000 housing units to the state’s total supply — a goal both chambers of the legislature signed onto. But the heart of the plan — interfering with local zoning codes — was a bridge too far for many legislators in the Assembly. Without it, it’s highly unlikely that the state will meet that target.

“There were a lot of members who thought they’d get killed in re-election if they were overriding local control,” said an Assembly source. “All the suburban members were very thankful that the mandates are out.”

While the state Senate also opposed many elements of the plan, top Democratic senators were open to a potential compromise, multiple sources said. According to a housing advocate familiar with budget negotiations, “the Senate got the fact we need to have mandates but were thinking about ways to make it weaker.”

The advocate said the Senate had suggested compromises like giving towns more time to hit the targets and putting a time limit on the mandate’s duration. (The body was not open to the part of the proposal that aimed to boost housing near mass transit, they said.)

Mike Murphy, a spokesperson for Senate Democrats, and Mike Whyland, a spokesperson for Assembly Speaker Carl Heastie, did not respond to requests for comment.

As a replacement for Hochul’s plan, the legislature proposed creating a $500 million fund for infrastructure grants to incentivize towns to grow their housing stock. Other states have attempted similar optional grant programs, but they have largely failed to increase housing supply. Last month, multiple mayors of suburban towns and villages told New York Focus that they wouldn’t participate in such a program.

Hochul’s team isn’t interested in pursuing this route, either. “It remains clear that merely providing incentives will not make the meaningful change that New Yorkers deserve,” the governor said Tuesday in a statement.

Other elements of Hochul’s housing plan are still under discussion, such as allowing New York City to increase the density of new housing, or promoting conversions of office space to housing, the Assembly source said. A similar program that New York created in 2021 to convert disused hotels into affordable housing has largely failed.

The growth targets’ failure may also mean that tenant protection and homelessness prevention measures are less likely to pass in this year’s budget. A top priority for progressive legislators and activists is a proposed law known as good cause eviction, which would limit rent increases and give most tenants the right to renew their leases. Another proposed program would provide rental assistance vouchers for homeless New Yorkers and tenants at risk of eviction.

Hochul didn’t mention either one in her initial budget proposal, but progressives hoped that she’d be willing to include them in the final budget to win support for the Housing Compact. With the Housing Compact off the table, the trade is likely dead, too.

That’s not to say that progressives are giving up. “We’ve been hearing from both houses for months that 2023 is the year to get good cause done. So we are committed to that,” said Cea Weaver, campaign coordinator of the advocacy group Housing Justice for All.

One reason for the Housing Compact’s apparent failure was a lack of pushback to suburban opposition, the advocate tracking negotiations said. “New York City didn’t care about the compact. The mayor barely ever mentioned it,” they said. “Having more people from the city fighting for it to help overrule suburban members would have helped.”

A housing policy expert said that a lack of support from the real estate industry also hurt the proposal.

“The industry wasn’t fully behind it. They were concentrating much more on stopping good cause eviction than helping the compact,” they said. The 5 Boro Housing Movement, a real estate-backed housing advocacy group, doesn’t mention the Housing Compact on its website.

The Housing Compact’s failure will harm New Yorkers struggling with the state’s rising housing costs, said Rachel Fee, director of the affordable housing advocacy group New York Housing Conference.

“Rents are skyrocketing, homeownership is out of reach for many, and we have record homelessness,” Fee said. “If we’re not going to take action now, then when?”